It doesn’t seem possible that the Medicare prescription drug benefit turns 20 years old this year, but it’s true. The legislation was signed into law December 8, 2003, following years of unfruitful efforts to add the benefit to the nation’s premier healthcare program for seniors and the disabled. While the implementation of the drug benefit didn’t begin until 2006, the implementation effort started immediately following President George W. Bush’s signature.

Medicare kicked off the program with voluntary drug discount cards that Medicare beneficiaries could use to trim their drug expenses. The cards provided a credit of $600 for eligible prescription drugs with a co-insurance of 5% to 10% depending on income. Seniors with incomes up to 135% of the poverty level were eligible for an additional $600 credit in 2005.

Impact on Long-Term Care of Part D

Prior to 2006, the primary payer for nursing home residents’ prescription drugs was Medicaid. Since two-thirds of nursing home residents were dually eligible for Medicare and Medicaid, they relied on Medicaid for drug coverage.

The LTC pharmacy industry fought across dozens of Medicaid drug programs against lower reimbursement at a time when only a few states provided any differentially higher reimbursement for institutional residents, usually added reimbursement for dispensing in unit dose. At the time, I was executive director of an LTC pharmacy trade association. In 2004, we had contract lobbyists in 28 states devoted to pushing back against dispensing fees as low as $1.35. In 2006, that all changed when dual eligibles began getting their drug benefit through Medicare. Read more >